FG to re­view power sec­tor pri­vati­sa­tion

Daily Trust - - NEWS - By Hamisu Muham­mad, Chris Agabi & Si­mon Echewo­fun Sun­day

The Fed­eral Govern­ment said it has com­menced the process of re­vis­it­ing the pri­va­ti­za­tion of power sec­tor in the coun­try.

This is com­ing barely 19 days to the fourth an­niver­sary of the power sec­tor pri­vati­sa­tion.

Speak­ing yes­ter­day at the clos­ing press brief­ing of the 23rd Nige­rian Eco­nomic Sum­mit, Min­is­ter of State for Bud­get and Na­tional Plan­ning Ha­jiya Zainab Ahmed said govern­ment was dis­cussing with rel­e­vant stake­hold­ers to al­low fresh in­vestors in­ject more funds into the sec­tor.

The Min­is­ter also noted that since the power as­sets were pri­va­tized, Nige­ri­ans have not de­rived the in­tended ben­e­fits thus the need to re­view cur­rent in­vest­ments in the sec­tor.

Govern­ment had in­jected N701.9 bil­lion to en­able busi­nesses flour­ish and it was in­tended to save the GenCos, the gas com­pa­nies and their fi­nanciers from col­lapse.

“The power sec­tor has been pri­va­tized but ev­ery Nige­rian will at­test to the fact that the pri­va­ti­za­tion hasn’t worked out well be­cause what we sought to achieve in the devel­op­ment of the power sec­tor hasn’t yet hap­pened” She said.

Mrs Zainab said “No new in­vestor will be in­ter­ested to come in with the level of tar­iff ob­tain­able now.

“It is very clear that no new in­vestor will be com­ing with­out hav­ing a sat­is­fac­tion from the tar­iff that will be ob­tain­able in the in­dus­try.

“That is a dis­cus­sion that must be held. It is very clear to us now that the level of tar­iff we have now is not ob­tain­able. It will be a sub­ject of ne­go­ti­a­tion be­tween govern­ment, the ex­ist­ing in­vestors and new in­vestors as well as con­sumers.

“We will try to at­tain to op­ti­mal level that will make an im­pact on the tar­iff. The start­ing point will be the Dis­cos.”

At the open­ing of the sum­mit Tues­day, Vice Pres­i­dent Yemi Os­in­bajo told the elec­tric­ity dis­tri­bu­tion com­pa­nies (DIS­COs) to in­vest and run their busi­nesses prof­itable or sell to those who can, if they were not able to man­age them.

The FG has 40 per­cent eq­ui­ties in the 11 DIS­COS while the DIS­COs own­ers have 60 per­cent eq­uity. Re­cently, the Se­nate backed the re­view of the pri­vati­sa­tion process. Chair­man of the Com­mit­tee on Pri­vati­sa­tion, Se­na­tor Ben Mur­ray Bruce (PDP, Bayelsa) said at the ple­nary that “They [power dis­tri­bu­tion com­pa­nies] are tech­ni­cally bank­rupt. Un­less we re­visit the en­tire pri­va­ti­za­tion process, un­less we un­der­stand and dis­sect what went wrong, we will still get es­ti­mated billing. We have a catas­tro­phe in our hands. There will be no light in Nige­ria un­der the cur­rent struc­ture.”

Ex­ec­u­tive Sec­re­tary of the As­so­ci­a­tion of Power Gen­er­at­ing Com­pa­nies (APGC), Dr Joy Ogaji told Daily Trust yes­ter­day that who­ever is rep­re­sent­ing govern­ment in­clud­ing the Bu­reau of Public En­ter­prises (BPE) should be repo­si­tioned to move the sec­tor for­ward.

“For the Gen­er­a­tion Com­pa­nies (GenCos), I don’t think govern­ment has ma­jor shares again be­cause most of the GenCos were sold 100 per cent.

“For the three hy­dro GenCos, govern­ment can­not do any­thing un­til the 30 year con­ces­sion pe­riod is ex­hausted. BPE in its in­spec­tion said the GenCos have ex­ceeded their Key Per­for­mance In­di­ca­tors (KPI) and busi­ness plan.”

For the Dis­tri­bu­tion Com­pa­nies (Dis­Cos), Dr Ogaji said, “From the on­set govern­ment should have used the bench­mark or the KPI in the per­for­mance agree­ment to vig­or­ously mon­i­tor the Dis­Cos.”

The Min­is­ter of Power, Works and Hous­ing, Ba­batunde Fashola had said that re­view­ing the pri­vati­sa­tion and find­ing so­lu­tions to the liq­uid­ity and tech­ni­cal crises was part of the on­go­ing im­ple­men­ta­tion of the Power Sec­tor Re­cov­ery Pro­gramme (PSRP).

The pro­gramme if ef­fec­tively ex­e­cuted is ex­pected to re­po­si­tion the sec­tor and en­sure Nige­ri­ans be­gin to en­joy 4,000 megawatts per hour (mwh/h) from 2018.

Spokesman for the As­so­ci­a­tion of Nige­rian Elec­tric­ity Dis­trib­u­tors (ANED), Bar­ris­ter Sun­day Odun­tan had de­clared in a pre­sen­ta­tion at a work­shop for re­porters on Wed­nes­day that govern­ment should im­ple­ment a cost re­flec­tive tar­iff, cre­ate a spe­cial in­ter­ven­tion fund and pay all the MDAs debts promptly to ease liq­uid­ity in the sec­tor.

He said the 11 Dis­tri­bu­tion Com­pa­nies (Dis­Cos) have re­duced cus­tomers me­ter­ing gap by 2.2 mil­lion since the power sec­tor was pri­va­tised in 2013.

Ac­cord­ing to him, the pri­vate in­vestors met a 5 mil­lion me­ter­ing gap in the sec­tor, when they took over on Novem­ber 1, 2013 and re­duced that gap to 2.8m.

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